Universal agrees to buy V2 Music for £7m

Universal Music last night announced its intention to buy V2 Music - home to Paul Weller and Stereophonics - for a rumoured £7m.

Sir Richard Branson is believed to have agreed to sell his minority stake in V2, which is currently controlled by Morgan Stanley.

He set up V2 after selling his original Virgin label, which is now owned by EMI.

Universal, the world's biggest music company, said the deal was subject to regulatory approval. It also revealed it is testing the sale of music without copyright protection, following a similar move by EMI.

But while EMI chose Apple's iTunes to sell its music without digital rights management (DRM), Universal has excluded the iTunes store in what is thought to be an attempt to challenge Apple's dominance of downloads.

DRM has become a contentious issue because it stops consumers copying music and restricts the number of devices on which it can be played.